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Globalization, Innovation and Productivity in Manufacturing Firms: A Study of Four Sectors of China

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Author Info

  • Jacques MAIRESSE

    (Jacques MAIRESSE INSEE-CREST (France), UNU-MERIT (Netherlands), and NBER (USA))

  • Pierre MOHNEN

    (Pierre MOHNEN UNU-MERIT (Netherlands), and Maastricht University)

  • Yanyun ZHAO

    (Yanyun ZHAO Renmin University of China)

  • Feng ZHEN

    (Feng ZHEN Bank of China, and Chinese Academy of Social Science)

Abstract

This paper investigates relationships between innovation input, innovation output and labor productivity in China for four major manufacturing sectors; textiles, wearing apparel, transport equipment and electronic equipment. It uses a large sample of firm level micro data and a structural model in the estimation. The data from 2005 to 2006 is estimated, and results of all the sectors show positive effects from innovation input to output, and then to firm performance. Globalization has various impacts on innovation, through exports. It has a positive effect on both the decision to carry out R&D, and intensity of R&D input in sectors with competitive advantage, such as textiles and transport equipment, but not in sectors with high levels of overseas capital control, such as electronic equipment and wearing apparel. Ownership reveals the same story in different sectors, namely that foreign firms tend to do less in innovation input and output, but they do have higher level of productivity. Moreover, market share, subsidy, firm size and other characters of firms are involved in the estimation, which explains significant difference in engaging in innovation and production. Thus, in all the sectors, market share improves R&D input, continuous R&D input and exports improve new products output. Subsidy sustains R&D input, but not innovation output.

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Bibliographic Info

Paper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number DP-2012-10.

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Length: 34 pages.
Date of creation: 01 Jun 2012
Date of revision:
Handle: RePEc:era:wpaper:dp-2012-10

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References

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  1. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation, and Productivity: An Econometric Analysis at the Firm Level," NBER Working Papers 6696, National Bureau of Economic Research, Inc.
  2. Ebling, Günther & Janz, Norbert, 1999. "Export and innovation activities in the German service sector: empirical evidence at the firm level," ZEW Discussion Papers 99-53, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
  4. Pierre Mohnen & Jacques Mairesse & Marcel Dagenais, 2006. "Innovativity: A Comparison Across Seven European Countries," CIRANO Working Papers 2006s-11, CIRANO.
  5. Alessandro Sterlacchini, 2001. "The determinants of export performance: A firm-level study of Italian manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(3), pages 450-472, September.
  6. José Miguel Benavente, 2002. "The Role of Research and Innovation in Promoting Productivity in Chile," Working Papers wp200, University of Chile, Department of Economics.
  7. Janz, Norbert & Lööf, Hans & Peters, Bettina, 2004. "Firm Level Innovation and Productivity - Is there a Common Story Across Countries?," Working Paper Series in Economics and Institutions of Innovation 24, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  8. Meng-Wen Tsou & Jin-Tan Liu & James K. Hammitt & Kuang-Hsien Wang, 2008. "Exporting And Productivity Growth: Evidence From The Taiwan Electronics Plants," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(2), pages 190-209, 05.
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Citations

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Cited by:
  1. Mohnen, Pierre & Hall, Bronwyn H., 2013. "Innovation and productivity: An update," MERIT Working Papers 021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. Mohnen, Pierre & Hall, Bronwyn H., 2013. "Innovation and productivity: An update," MERIT Working Papers 021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Fernández Gual, Verónica & Segarra Blasco, Agustí, 1958-, 2013. "The Impact of Cooperation on R&D, Innovation and Productivity: an Analysis of Spanish Manufacturing and Services Firms," Working Papers 2072/220761, Universitat Rovira i Virgili, Department of Economics.

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